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French TGV Est high-speed rail line spurs a mini boom

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  • 4/2 International Herald-Tribune
    Published Monday, April 2, 2007, in the International Herald-Tribune Speeding toward France s future High-speed rail spurs a mini boom By Nicola Clark
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      Published Monday, April 2, 2007, in the International Herald-Tribune

      Speeding toward France's future
      High-speed rail spurs a mini boom

      By Nicola Clark

      Strasbourg -- The sweeping cobblestone plaza that once greeted
      visitors exiting the 19th-century railway station here is now a vast
      sea of gravel and earth-moving equipment. In place of the sidewalks
      and taxi ranks, a 150-meter-long arcade of steel arches and scaffolds
      masks the station's original Renaissance-inspired facade.

      The construction work is part of a EUR60 million, or about $80
      million, metamorphosis of the Strasbourg station due to conclude this
      summer, when the French national rail operator SNCF introduces a new
      high-speed service to eastern France. It caps a five-year, EUR5
      billion investment to extend the country's famed TGV network from
      Paris to the German border with trains traveling at speeds of up to
      320 kilometers, or 200 miles, per hour.

      For Jean-Paul Manuel, a cab driver, the fast train is long overdue.

      "I think it is scandalous that we haven't had a TGV before now," said
      Manuel, 48, who has watched for 25 years as France's high-speed rail
      network expanded to places like Lyon, Lille and Marseille, turning
      once-quiet provincial towns into thriving tourist destinations.

      "This a European city," he said, referring to the European Parliament,
      which sits on the banks of the river Ill that meanders lazily through
      willow-lined embankments to the ancient timbered houses of the city's
      center. "It's time for us to wake up and get moving." Today in
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      Beginning June 10, the new TGV Est Européen line will nearly halve
      the current travel time between Strasbourg and Paris, to 2 hours and
      20 minutes from 4 hours, and placing much of the Champagne-Ardennes
      region within comfortable commuting distance of the French capital.
      The 300 kilometers of new high-speed track will bring other European
      cities closer, too, making the train a genuine alternative to air
      travel. For example, Frankfurt and Stuttgart, now a lumbering 6 hours
      from Paris by train, will be reachable in around 3 hours and 45
      minutes.

      Manuel and other residents of this Alsatian city of 270,000 have high
      hopes for what the imminent arrival of the eastern high-speed link
      will mean for the local economy. Strasbourg's hotel and tourism
      industry expects as many as 4.6 million visitors per year once TGV
      service begins, an increase of around 30 percent from 2006.

      A wave of construction and real estate speculation all along the new
      line is well under way. In Reims, soon a mere 45 minutes from Paris
      rather than the current 1 hour and 35 minutes, more than 80,000 square
      meters, or about 860,000 square feet, of new office space and hundreds
      of new homes have recently been built. New convention centers and
      shopping centers are springing up in Metz and Nancy, while apartment
      prices in central Strasbourg have risen as high as EUR5,000 per square
      meter -- on par with many Parisian neighborhoods.

      Frédéric Neff, who manages a Strasbourg real estate agency, said that
      "locals have been snapping up property in anticipation of a TGV
      effect." He added: "People are hoping the train will make it more
      attractive for companies to open offices and send their employees
      here."

      Economists caution, however, that expectations of a high-speed boom
      may be overblown. Olivier Klein, a transport economist at the
      University of Lyon, said the growth experienced in other TGV cities
      like Marseille and Lille was the result of broader, multi-year urban
      renewal projects of which the high-speed links were an important part.
      "There is a tendency to overvalue the effect of the train itself,"
      Klein said.

      The French national rail operator, SNCF, and Réseau Ferré de France,
      the state-owned track operator, have together paid 41 percent of the
      cost of the line, with the rest covered by the French and Luxembourg
      governments as well as the European Union. Guillaume Pepy, the SNCF
      chief executive, said 30 percent of a train ticket's price goes to
      cover track investment and maintenance charges, yet profit margins on
      the TGV service are around 12 percent.

      "That is extremely high in the railway industry," Pepy said.

      Meanwhile, the option of reaching the region quickly by train is
      forcing airports to reinvent themselves. Air France, which operates
      the only scheduled air connection between Paris and Metz-Nancy-
      Lorraine Airport, will end its service when the TGV line cuts train
      travel to one and a half hours from 2 hours 45 minutes -- resulting in
      a loss of 72,000 passengers per year, or one-fifth of the airport's
      total activity.

      Miriam Decker, an airport spokeswoman, said Metz-Nancy hoped to offset
      this loss by luring low-cost airlines such as MyAir, an Italian
      carrier.

      In Strasbourg, where flights to and from Paris represent more than
      half of the air traffic, the airport expects to see its annual
      passenger count drop to as low as 1.5 million from 2 million last year
      when the TGV prompts Air France to cut its 12 daily flights to the
      city to eight.

      Strasbourg has yet to sign up a low-cost carrier to replace Ryanair,
      which left in 2003 after Air France complained the airline had
      received illegal subsidies from the local government.

      City officials are lobbying hard to attract a new low-cost operator,
      but in the meantime the airport is focusing on new direct services
      to cities like Munich, Madrid, London and Copenhagen and expanding
      relationships with airline partners such as Royal Air Maroc.

      Pepy of SNCF acknowledged that the drop in air travel would be
      disruptive in the short term. "When you open a TGV line, there is
      always the same phenomenon," he said. "It's a huge shock at first,
      but then the market expands" to the benefit of all transport modes.
      He cited the example of Marseille, where annual air traffic plummeted
      after the high-speed link to Paris first opened there in 2001. Five
      years later, Marseille Provence Airport had recouped all its lost
      traffic and in October it opened a new terminal to handle additional
      traffic.

      Pepy predicted that European governments would invest as much as
      EUR150 billion in high-speed infrastructure over the next 15 years,
      doubling the size of the network to 8,000 kilometers. This year
      alone, three high-speed lines will open for service: aside from the
      TGV Est, the Netherlands will start service on the HSL-Zuid line from
      Amsterdam to the Belgian border in July. In November, Britain will
      open its High Speed 1 line, cutting 20 minutes off the Eurostar
      journey between Paris and a new terminus at St. Pancras station in
      London.

      "There is a huge opportunity for high-speed rail travel in Europe,"
      Pepy said. "It's more and more difficult for an airline to run a
      smooth service for European customers because of traffic congestion,
      safety issues and environmental problems," he said.

      On Tuesday, SNCF will attempt to set a new rail-speed record of 550
      kilometers per hour on the Paris to Strasbourg line. While Pepy said
      commercial train service at this speed was decades away, some
      travelers still dream of the possibilities.

      Diana Gutekunst bubbles at the idea of cities like Paris or Brussels
      being a daytrip by rail from her home in Rastatt, Germany, a village
      50 kilometers northeast of Strasbourg. Gutekunst, 36, flies to the
      French capital about four times a year for her job as a trainer for
      a surgical equipment maker - a four-hour journey door-to-door that
      today would be six hours and 40 minutes by train.

      "I could go once a month," she said with a smile. "They have some
      nice shops there."


      [BATN: See also:

      6 CA lawmakers to make fact-finding tour of TGV system
      http://groups.yahoo.com/group/BATN/message/34430

      HSR projects to make European rail travel even faster
      http://groups.yahoo.com/group/BATN/message/33977 ]
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